The parent company behind Australian clothing brands Rivers, Katies and Noni B has entered voluntary administration.
Key Takeaways
- Mosaic Brands has entered voluntary administration after attempts by the company to restructure its operations failed.
- The company had been working on plans to save its business, including focusing on key growth brands and reducing costs. It suspended trade in late August and expected to resume resume trading on the ASX after its restructure took place.
- Some parties declined to support the restructuring proposal or negotiate a commercial outcome, and so the business was placed into voluntary administration.
Small number
3.6 cents. That’s how much Mosaic Brand’s shares were trading at just before the company suspended trade at the end of August. It’s a far cry from the company’s share-price-high of $3.50 in 2018.
Now, the company’s market capitalisation is just $6.4 million
What we know
Mosaic Brands had been attempting to informally restructure its business by rationalising the Group’s Brand and store portfolio and focusing on key growth brands, reducing costs and improving its working capital position. That involved discussions with suppliers, landlords and even the ACCC. As a result, the company announced in September it had exited Rockmans, Autograph, Crossroads, W.Lane and BeMe brands, and closed about 200 of its 700 stores nationwide.
But according to the company’s statement to the ASX, a “small number of parties” declined to support the restructuring proposal or negotiate a commercial outcome, so a resolution couldn’t be reached with the ACCC. It decided the best way forward was voluntary administration.
The company appointed Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath from FTI Consulting as administrators.
Crucial quote
“Mosaic Brands continues to be an exciting opportunity to reshape a business with a clearly defined market proposition for its target customers, and employees, that we can be proud of.
“Our priority is to accelerate the rationalisation plans we have in place to focus on the core brands to service current and attract new customers across metropolitan and importantly regional Australia.” – Mosaic CEO, Erica Berchtold.
Tangent
The retail bust has hit a few operators this year, namely renowned Australian fashion brand Dion Lee, which entered voluntary administration in May this year, and Booktopia, which collapsed in July.
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